Students at a service academy are considered active duty military members by federal law. Their salary is military pay for which they receive a W-2. It is earned income. They are eligible to claim the EITC. Since these young people are obligated to five years of military service upon graduation, I would hardly consider them to be receiving a "free ride", nor a "giveaway" by the Congress.
I would also point out that service academy students are not allowed to claim the American Opportunity Credit, Lifetime Learning Credit, or the Tuition and Fees deduction for books and other education-related expenses. That's because the service academies are not "eligible educational institutions" for purposes of these credits.
Some relevant federal law:
38 USC 101(b)(21) states, "The term 'active duty' means service as a cadet at the United States Military, Air Force, or Coast Guard Academy, or as a midshipman at the United States Naval Academy."
38 USC 1965(1)(d) states, "The term 'active duty' means full-time duty as a cadet or midshipman at the United States Military Academy, United States Naval Academy, United States Air Force Academy, or the United States Coast Guard Academy."
The IRS has a page with further information on this topic:
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/military-and-clergy-rule....
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
